U.S. Dollars worth more in another country?

Question

It's probably a stupid question, but doesn't an American dollar have more value in other parts of the world? For example . 10 American dollars here buys you ____. ., but that 10 American dollars in a foreign country buys you much more.(has more value) in a poorer country. If thats correct than cant someone invest say 10,000 U.S. dollars into a foreign bank, let it sit there awhile and compound at whatever rate the foreign bank is at. When that money is withdrawn or transferred back into the U.S. and exchanged at the higher exchange rate. It is alot more than what would be made if it was left in an American bank for the same amount of time? Considering that the interest rates were similar? Not sure if I make any sense or am asking the question improperly.

Answer 1

what you said is lets say scrambled. but I get what your getting at, and the answer is no, you would break even.

Example:

let say u have $100, and the exchange rate to some country is .5, so 50 US cents buy's 1 unit in the other country. so u convert your $100 into 200 of the other country. interst rate are the same in both country's lets say 10%.

In the US over one year you would make $10, in the other country you would make 20 in the other currency. if at the end of a year the exchange rates were still the same, you convert your 220 of the other country back into US and get $110, the same as the $110 you would have had if you just left the money in the US.

Answer 2

You can make money doing this but only if the exchange rate shifts; if the interest is the same in both countries and the exchange rate stays stable, when you convert it back you have pretty much what it started at. You can play the odds and invest in the hopes that the exchange rate will become more favorable but that's just like any other investment. Maybe you make money, maybe you lose it all!

Answer 3

The first part of what you said is generally correct. U.S. money has more buying power in many foreign countries. Your investment plan however will not work. You could possibly invest in something like the Canadian dollar and hope that it's value compared to the U.S. dollar increases.

Answer 4

You have the basic concept right. But, keep in mind, many countries economies will "adjust" to the US dollar. So, if one dollar is worth two units from another country... A load of bread may cost 2USD... but the other country may adjust to 4 units in their currency. Right now, countries like Thailand, Malaysia, and Indonesia are still good travel bargains regardless of the fact that the USD is at its weakest point in ten years.

Answer 5

Yes American dollars are worth more in some other places. Like if you convert it into egyptian pounds, it will become 6 instead of 1.

You could invest in some other countries if their money is becoming popular, etc, but it's risky.

Answer 6

Yes, the US dollar is worth alot more in other countries. But not all of them. For example, Kuwait's money has a higher value than the USD. It's one Kuwaiti Dinar to 3.5 US dollars. But just across the border in Iraq, it's 1,450 Iraqi Dinar to 1 US dollar. You're asking the question correctly, at least I understood it.

Answer 7

Wouldn't work in the UK..currently there are around $2 to the £, so your $10 is only worth £5 here and that will about get you one gallon of fuel for your car with just a little left over!

Answer 8

Not in Europe, the exchange rate over here sucks!